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Friday, November 5, 2010

Stock Market and Commodities Commentary For Friday Evening Nov. 5th

The S&P 500 index closed higher on Friday as it extends this fall's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, the 62% retracement level of the 2007-2009 decline crossing at 1234.75 is the next upside target. Closes below the 20 day moving average crossing at 1182.06 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1224.20. Second resistance is the 62% retracement level of the 2007-2009 decline crossing at 1234.75. First support is the 10 day moving average crossing at 1191.86. Second support is the 20 day moving average crossing at 1182.06.

Crude oil closed higher on Friday as it extends the rally off August's low. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If December extends the aforementioned rally, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 82.93 would confirm that a short term top has been posted. First resistance is today's high crossing at 87.22. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support is the 10 day moving average crossing at 83.55. Second support is the 20 day moving average crossing at 82.93.

Natural gas closed higher on Friday as it consolidates some of Monday's decline. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. If December renews this year's decline, weekly support crossing at 3.390 is the next downside target. If December extends the rally off October's low, the reaction high crossing at 4.207 is the next upside target. First resistance is Monday's high crossing at 4.187. Second resistance is the reaction high crossing at 4.207. First support is last Monday's low crossing at 3.500. Second support is weekly support crossing at 3.390.

Gold closed higher on Friday and posted another new all time high as it extends this year's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices is possible near term. If December extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the reaction low crossing at 1315.60 would confirm that a short term top has been posted. First resistance is today's high crossing at 1398.70. First support is the 10 day moving average crossing at 1352.30. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher due to short covering on Friday as it consolidates some of this year's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. Closes above the reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. First resistance is last Wednesday's high crossing at 78.51. Second resistance is the reaction high crossing at 78.61. First support is Wednesday's low crossing at 75.24. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.